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RAC Foundation: 830,000 households in UK spend at least 27% of their income on running a car; “transport poverty”

The poorest 10% of car-owning households in the UK—some 830,000—are spending at least 27% of their disposable income on buying and running a vehicle and are thus “mired in transport poverty”, according to a new analysis by the RAC Foundation. The Royal Automobile Club (RAC) Foundation for Motoring is a transport policy and research organisation which explores the economic, mobility, safety and environmental issues relating to roads and their users.

By contrast, those in the wealthiest car-owning households are spending around 12% of their disposable incomes on purchasing and operating a car.

Of a total weekly expenditure of £167 (US$250), those in the poorest car-owning households see £44 (US$66) go on vehicle-related purchasing and operating costs. Of the £44, £16 (US$24) is used to buy gasoline and diesel and £8.30 (US$12) is spent on insurance.

The high level of expenditure is revealed in analysis of previously unreleased data from the Office for National Statistics which has been seen by the RAC Foundation.

These figures should shock the Chancellor. We already knew transport was the single biggest area of household expenditure bar none. But this spending breakdown just for car-owning households is not normally available. It lays bare the truth about the extent of transport poverty in the UK.

There is understandable concern about home owners having to spend more than 10% of their money on heating their houses. But to most of us transport is another essential item and our outgoings on getting about eclipse all other domestic bills.

George Osborne will soon deliver his budget and is likely to tinker with the rate of fuel duty. For people already drowning under the weight of motoring costs, cutting a penny or two off the price of a litre of fuel will help but is like rearranging the deck chairs on the Titanic—ultimately futile. To make any meaningful difference to those on the lowest incomes the rate will need to be cut much further.

—Professor Stephen Glaister, director of the RAC Foundation

In November 2012 the Office for National Statistics published the Living Costs and Food Survey for 2011. The published results showed that of average household (car and non-car owning alike) expenditure of £483.60 (US$725) per week, transport was the highest at £65.70 (US$99) or 14%.

It was only upon request that the RAC Foundation obtained from the ONS data relating only to car owning households.

The average price of unleaded gasoline in the UK in January 2013 was 132.7 p/liter (US$7.54/gallon US), up from 76.3 p/liter (US$4.32/gallon US) in January 2003. Diesel prices are a few p higher per liter.

In January, the UK Office of Fair Trading said that increases in gasoline and diesel prices over the past ten years are largely caused by increases in taxation and oil prices and not a lack of competition. (Pre-tax, the UK has some of the cheapest road fuel prices in Europe, according to the OFT.) About 60% of the pump price is accounted for by fuel duty and VAT, according to Professor Stephen Glaister, director of the RAC Foundation.

The UK Automobile Association (AA) reported in February that January’s UK gasoline sales fell to the lowest tracked by government in 23 years. AA also reported that gasoline prices in the UK shot up 5p a liter over January, with speculation in fuel and currency markets being the main drivers of this third price surge in less than a year.

Comments

mahonj

This may sounds harsh, but if you are that poor, perhaps you shouldn't run a car - use public transport or a bike.

(I sounds a bit like Norman Tebbit here !)

I suppose that would work if cars were just about transport, but they are about self image as well and this is where people come unstuck and buy cars that they can't afford / don't need.

So it is as much as social as a financial problem and thus is beyond my remit.

kelly

"The average price of unleaded gasoline in the UK in January 2013 was 132.7 p/liter (US$7.54/gallon US), up from 76.3 p/liter (US$4.32/gallon US) in January 2003. Diesel prices are a few p higher per liter."

"The poorest 10% of car-owning households in the UK—some 830,000—are spending at least 27% of their disposable income on buying and running a vehicle and are thus “mired in transport poverty”,"

GM gave the world annual planned obsolescence, V8s, ~10 mpg, high maintenance costs, and "most of a years pay" MSRP.

OPEC/oil took the rest.

One-moving-part EVs fueled by 0-1 moving-part renewable solar/wind electricity will be the remaining viable new century personal transportation.

DavidJ

The expression "fuel poverty" is used in the UK to describe those who cannot afford to adequately heat their homes. The phrase "transport poverty" will be used to make an association and make use of existing debate on the subject though the analogy breaks down as mahonj pointed out because their is a cheaper choice for transport.

HarveyD

Yes. the Big 3, the Oil Barons, OPEP and the R-like politicians did a good job to drive the other 95% into poverty.

Will Asia produce a car that the 95% clan afford?

kelly

"..their is a cheaper choice for transport."

..could include walking and biking, but there seems something addictive about about being 'out of the elements', hauling what/who you need up to the doorstep.

HarveyD

kelly....let's be practical. The industrialized world population will not go back to walking or running unless we have a very long worldwide economic depression.

However, future clean running electrified 2, 3 and 4 wheel affordable vehicles will multiply in the next one or two decades.

ToppaTom

It seams to me that this article says the English people, not the US automakers, Oil Barons, and the R-politicians are the cause.

So it seems likely that the US automakers, Oil Barons, and the R-politicians have PROTECTED the US underachievers from "transport poverty".

And here, the D-like politicians are pouring our money down green rat holes that have made only token improvements in ANYTHING in the last 15 years.

Cheap energy, fracking, natural gas, low CO2 emissions, affordable high MPG ICEs, lower taxes, less national debt - O M G ... it's a brave new world.

The last thing the transport poor in Europe need is an expensive EV that can maybe break even only if you drive many miles, even with all of us helping to pay for it.

mahonj

@toppa, I am with you on the EV thing - the last thing the poor need is a product in development.

What they need are, bikes, buses or small cars with the occasional taxi thrown in, and lifts from family/friends.

When I was little, we didn't have a car (in '60's Ireland) and my father rented his brother's Morris Minor for the odd week end.

Another problem is that of old people who can no longer drive due to eyesight or other problems (like my mother now).

She is also unable to walk more than 100 metres, and so can't use buses or walk or bike(!). Taxis are expensive (e7 to the supermarket, e7 back), so her children and friends give her lifts to the supermarket etc.

That is where automatic driving cars could come in - but not for a decade or two when they will be debugged and cheap enough for older people to purchase or rent.

kelly

120 million Chinese use ebikes for urban transportation, but you can't see how a electric motor and small light car with 1/5 the price of gas electricity could work.

ToppaTom

Good points mahonj.

Most people are able to accept the fact that EVs are not yet ready, and pushing/financing the sales of what is available today does not seem to be making them better.

Most people are also able to accept that although large vehicles with one driver each is inefficient, the desire for comfort and freedom has fueled the drive that has taken us from cowering together in caves at night to lighting up our planet at night and being able to go into space to see it - and drive a Hummer or Tesla if we so desire.

Virtually everyone knows that life could be simpler and much more efficient, but most of us also realize that we will waste some of our effort on frivolous luxuries along the way.

Much as I (and most) hate regimentation, automatic driving cars are likely to catch on and take over rapidly when they are reliable and cheap enough for all to purchase or rent.

Maybe by then, and because of the automatic aspect, the desire to own a large, uneconomical or inefficient vehicle (or to even OWN your own vehicle) will evaporate.

HarveyD

Ultra light, taking (voice command) autonomous driving, lower cost e-vehicles will certainly replace most current complex polluting heavy ICEVs. Otherwise, many large cities will have to limit and curb the use of ICEVs to reduce air pollution.

It is just a question of when?

Meanwhile, restricted range e-bikes, e-3-wheels and 4-wheels will grow in popularity and performance.

Resistance to change is futile.

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